Perizat Buzaubayeva

This study aims to assess the impact of regulatory compliance on the effectiveness of risk management and the financial performance of Kazakhstan’s banking sector. Applying Structural Equation Modeling (SEM), the study examines data from Kazakhstani banking institutions, revealing the direct and mediated impacts of regulatory compliance on financial performance, with risk management efficacy as a key intermediary. The analysis identifies a significant direct relationship between regulatory compliance and risk management efficacy (coefficient: 0.45, p-value: < 0.001), suggesting that compliance efforts substantially bolster risk management capabilities. The impact of risk management efficacy on financial performance is also notable (coefficient: 0.35, p-value: < 0.001), confirming its crucial role in financial success. Additionally, a direct, though less pronounced, influence of regulatory compliance on financial performance is observed (coefficient: 0.20, p-value: 0.004). The model’s explanatory power is reflected in an R-squared value of 0.248, indicating that it accounts for approximately 24.8% of the variability in financial performance. These findings underline the critical role of regulatory adherence and effective risk management in ensuring financial success, offering strategic insights for banking operations in Kazakhstan.

Type of the article: Research Article

Abstract
Digital government platforms are expected to accelerate the shift to cashless payments, and banks stand between the two: they hold the accounts that digital credentials open and process the government-to-person and person-to-government flows that digital services generate. Cross-country evidence for transition economies remains scarce and largely contemporaneous. The study aims to determine whether digital government maturity is associated with the uptake of cashless payment instruments contemporaneously or with a delay, and whether the deployment model shapes that association beyond aggregate index scores. Wave panels combining the Global Findex database (2011–2024) with the UN E-Government Development Index for eleven transition economies were estimated using pooled, fixed-effects, between-country, lagged, and first-difference specifications, supplemented by an exploratory annual panel of ATM density and a structured comparison of three deployment models. A strong cross-country association between GovTech maturity and both digital payment adoption (0.551, p < 0.001) and account ownership (0.730, p < 0.001) did not survive within-country identification: fixed-effects coefficients turned negative and insignificant, so H1-H3 are not supported. With a four-to-five-year lag, the Online Service Index entered positively and significantly in the baseline specification (0.290, p < 0.05); as significance is not retained with controls, the evidence is consistent with a delayed association rather than establishing it. Adoption expanded under all three deployment models, from 47% to 85% in Kazakhstan, 48% to 83% in Ukraine, and 12% to 61% in Armenia; what distinguished the cases was the interface between the state and private bank ecosystems, which aggregate indices do not capture.

Acknowledgment
Liudmyla Zakharkina’s contribution to this article was made within the framework of the research project “GovTech for Ukraine: A Digital, Secure, Transparent, and Equitable State in Times of War and Post-War Reconstruction” (registration number: 0126U000544), funded by the Ministry of Education and Science of Ukraine.